LBChain – blockchain sandbox

LBChain is a blockchain-based technological sandbox which combines regulatory and technological infrastructures and allows start-ups to test their business solutions in a controlled environment. The platform will enable start-ups to gain new knowledge, carry out blockchain-oriented research, test and adapt blockchain-based services and offer state of-the-art innovations to their customers.

Innovation Summary

Innovation Overview

As the central bank and financial market supervisory authority, the Bank of Lithuania is primarily responsible for the regulation and supervision of market participants in accordance with applicable legal acts and requirements. Development of a fintech-conducive regulatory and supervisory ecosystem as well as fostering innovation in the financial system is one of the Bank of Lithuania’s strategic directions. Together with other state authorities, the Bank of Lithuania contributes to the development of new growth opportunities for fintech market participants by creating and maintaining a supportive environment, stimulating competitiveness and innovations in the field of finance.

LBChain is a blockchain-based technological sandbox which combines regulatory and technological infrastructures and allows start-ups to test their business solutions in a controlled environment. The platform will enable start-ups to gain new knowledge, carry out blockchain-oriented research, test and adapt blockchain-based services and offer state of-the-art innovations to their customers.

By creating LBChain, the Bank of Lithuania seeks to:
* Create conditions for fintech to acquire know-how and conduct applied research;
* Facilitate the validation of experimental applications and solutions;
* Enable the exploration of development trends of disruptive technologies;
* Stimulate the demand for innovations and introduction of new products to the market;
* Improve the competitiveness of Lithuania and attract foreign direct investments (FDI).

To improve financial market regulation regulators needs to understand new blockchain based products form the core. LBChain – blockchain sandbox allows regulators work together with start-ups from the beginning of their idea and grow competence in new blockchain based financial products. For the start-up working with regulators from early stages of the product accelerates the development of their product and helps go to the market faster and with less expenses, and regulatory compliant. That brings the competitiveness to the financial market and the customer benefits from it.

Central goals of LBChain are: accelerate the development and application of blockchain-based solutions in the financial sector and improve the quality of regulation in the financial sector.

To create innovation sometime process of creation become innovation. For government institutions it is very hard to purchase innovative solutions because of complicated public procurement process. At the Bank of Lithuania we chose pre-commercial procurement (PCP) to create LBChain – blockchain sandbox. PCP is the method where public institutions and product suppliers co-create together, where public institution provide the need, hypothesis, and product suppliers provide their knowledge and resources needed to implement the idea.
The unique thing in PCP is competitive development in phases: procuring body buy R&D from several competing suppliers in parallel (LBChain case: UAB Inntec, UAB Deloitte verslo konsultacijos, UAB Tieto Lietuva, IBM Polska Sp.z.o.o.) to compare alternative approaches and identify the best value for money solutions that meets procuring body’s needs. PCP is split into three phases (solution exploration, prototyping, original development of a limited volume of first products) with the number of competing solution providers being reduced after each PCP phase.

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Year: 2019
Level of government: National/Federal government

Status:

  • Implementation - making the innovation happen

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